Oil prices rebound 2% ahead of API supply report

Published 2016-04-26, 09:37 a/m
© Reuters.  Oil jumps 2% ahead of API supply report
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Investing.com - Oil prices were up sharply in North America trade on Tuesday, rebounding from the prior session’s losses as market players looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products.

The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 2.3 million barrels in the week ended April 22.

Crude oil for June delivery on the New York Mercantile Exchange rose 74 cents, or 1.74%, to trade at $43.38 a barrel by 13:35GMT, or 9:35AM ET.

A day earlier, Nymex oil prices tumbled $1.09, or 2.49%, after market intelligence firm Genscape reported that U.S. crude stockpiles at the Cushing, Oklahoma delivery point rose by over 1.5 million barrels in the week to April 22.

New York-traded oil prices are up nearly 40% since falling to 13-year lows at $26.05 on February 11, as a decline in U.S. shale production boosted sentiment. However, analysts warned that market conditions remained weak due to an ongoing glut.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery tacked on 80 cents, or 1.81%, to trade at $45.12 a barrel.

On Monday, London-traded Brent futures lost 75 cents, or 1.66%, as reports of extra supplies coming from Saudi Arabia, Kuwait and Iran underlined concerns over a global supply glut.

Saudi Arabia announced that it will complete an expansion of its Shaybah oil field by June, pushing capacity to 12 million barrels per day, while Kuwait is expecting output to reach 3.15 million barrels per day by June after the end of a workers strike.

Meanwhile, Iran oil production has now increased by 1 million barrels per day since the beginning of the year, bringing it closer to pre-sanction production levels of 4 million barrels per day.

Brent futures prices are up by roughly 35% since briefly dropping below $30 a barrel on February 11.

Brent's premium to the WTI crude contract stood at $1.74 a barrel, compared to a gap of $1.68 by close of trade on Monday.

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